What will it take to grow cinema advertising's pie in Indian adex?

According to GroupM’s TYNY latest report, cinema advertising spends have grown from Rs 112 crore in 2021 to Rs 665 crore in 2022 in India, but its contribution to the overall Indian adex has been constant at a mere 1% for more than 4-5 years. 

GroupM further estimated that altogether brands will spend Rs 810 crore on cinema advertising in 2023, but its share in adex won’t increase beyond 1% and not surpass 2019 (pre-Covid) adex figures of Rs 1,008 crore. 

While the worse is behind for the medium, the rise of OTT platforms and content creators on social media has led to a shift in the manner brands approach advertising in cinema halls.

Uday Mohan

Uday Mohan, President and Chief Client Officer, Havas Media Group India, said that OTT has proved to be the most significant cause for the decline in cinema footfalls with wide availability of the content which can be viewed as per the individual’s requirement. 

“Most of the high-profile releases are also beginning to be available on OTT platforms within weeks of release. It, therefore, makes far more economic sense to watch a movie at home - taking into account the high cost of the tickets, as well as the refreshments which one inevitably buys and which leaves a deep hole in the pocket,” Mohan stated.

He went on to say that the recent strong response to Pathaan and the footfalls it has generated did bring hope but this is more of a flash in the pan, which can be seen with the lukewarm response to Selfie – Akshay Kumar's release. 

"Even the latest round of TGI 2022 (Wave 2) and its media consumption trend do not show favourable trends. From TGI 2022 Wave 1 to Wave 2, cinema reach in the urban universe declined from 6.2% to 4.9%. Among core youth and adult audiences, media reach witnessed a declined trend from 7.9% to 6.5%," he added.

Sanjeev Goyle

However, according to Sanjeev Goyle, CEO - OOH and Rural, Mediabrands India, the cinema industry is now showing signs of resurgence after the Covid-19 impact.

"One of the main drivers of this revival is the pent-up demand for entertainment among the audience. People are eager to get out and experience the joy of watching movies on the big screen again. This has resulted in a surge in footfalls at cinemas, with audiences returning in large numbers to watch the latest releases," he added. 

“The year 2023 looks power-packed with top Bollywood and South Indian celebrities returning to the big screens. While the industry has revived to half the level of pre-pandemic numbers, the growth witnessed till now is reassuring. Movies like RRR, KGF-2, Avatar: The Way of Water, and Pathaan have performed well and we expect the industry to almost reach its pre-pandemic level,” Goyle said.

Goyle further said that cinema advertising has emerged as an effective marketing tool in India, with brands like Monte Carlo, Vicco, Manyavar, and Kotak Mahindra Bank consistently registering in consumers' minds due to their presence on the big screen.

"With the growth of multiplexes and rising consumer spending on entertainment, the industry has seen steady growth over the past decade. Advertisers have realised the potential of reaching out to a captive audience in the cinema hall," he added. 

He went on to state that the shift in consumer behaviour and demand for new content at higher frequency has led to a phenomenal response to South Indian movies - due to the entertainment aspect they bring to the audience.

"We believe that cinema advertising in India is promising, as the industry continues to recover. The introduction of new technologies will provide advertisers with more opportunities to create engaging and immersive experiences for their audiences," Goyle added.

On the other hand, Mohan shared that cinema advertising will have to reinvent itself and have to go beyond just airing the TVCs to provide an experiential experience. It would need to find a way and means to talk to the audience walking into the cinema halls and get them to experience products/services and use this as a source of database collection.

Cinema companies have been trying hard to lure advertisers by bringing in innovations in theatre advertising. For example, last year in September, as part of its experiential offering, PVR collaborated with OnePlus to unveil the OnePlus 10T 5G, through a multi-sensory commercial using 4-dimensional effects which was screened in all PVR 4DX cinemas.

In July 2022, PVR introduced 270-degree on-screen experiential in-cinema advertising. Maruti Suzuki became the first advertiser to use this platform to launch its new 2022 Maruti Suzuki Brezza in cinemas. 

The innovation was brought forth by PVR in collaboration with Xperia Group, an OOH media company, using 3D Projection Mapping on the side walls, powered by hybrid technological integration. 

Not just this, to increase footfalls, PVR has started banking on India’s love for sporting events. Last year, PVR Cinemas entered an exclusive partnership with Visa for organising ‘FIFA World Cup 2022 Viewing Parties’ across 11 properties in 8 cities. It also closed a deal with the International Cricket Council (ICC) for the live screening of the ICC Men's T20 World Cup 2021, in India in 2022. 

UFO Moviez - the in-cinema advertising platform - reported that its advertising revenue in Q3FY23 recovered after the dip in Q2FY23 and surpassed the Q1FY23 levels. 

UFO Moviez’s consolidated ad revenue stood at Rs 1,164 crore for the quarter ending December 31, 2022. The consolidated ad revenue was Rs 50 crore in the corresponding quarter of the previous year. In Q2FY23, the platform’s consolidated ad revenue was Rs 1,134 crore.

The company attributed this growth in ad revenue to the steady increase in footfalls to the big screen and improvement in PSUs and the state government’s advertisement spending. The overall business saw a marginal improvement led by a recovery in Hindi movie acceptance and content flow.

"After the subdued performance in the last quarter due to content challenges, Q3FY23 proved to be the best quarter so far post-pandemic, with net profitability reaching near breakeven levels despite the performance of Hindi movies still not at pre-COVID-19 levels," Rajesh Mishra, Executive Director and Group CEO had said.

Similarly, Inox Leisure reported ad revenue of Rs 35 crore in the third quarter of FY2023, which is still 40% less than the Rs 58 crore ad revenue it earned in the corresponding quarter in FY2020, in the pre-COVID-19 phase. However, the total revenue of the company has risen to Rs 522 crore in Q3 FY23, as compared to Rs 518 crore in Q3FY20. 

"The inevitable cheerfulness and buoyancy is back on the cinema floor, and is clearly reflecting on our quarterly performance. This quarter not only reiterates the fact that normalcy is back, but also reconnects us with our usual journey of growth and profitability. Our constant pursuit of innovativeness and our desire to offer the best cinema-viewing experience have played significant roles in a quarter which may be termed as a remarkable one. Content, like always, remains the most critical aspect, and would continue to play a pivotal role in the coming quarters as well," Siddharth Jain, Director – Inox Leisure, stated earlier. 

PVR’s advertising revenues grew 38.5% QoQ to Rs 792 crore in Q3 FY23, but continued to remain 35% below pre-covid levels. In Q3FY2020, the advertising revenue was Rs 1,220 crore. In Q2FY23, the advertising revenue earned was Rs 572 crore. 

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